Chapter 1

The Project Gutenberg eBook of Up To Date Business This eBook is for the use of anyone anywhere in the United States and most other parts of the world at no cost and with almost no restrictions whatsoever. You may copy it, give it away or re-use it under the terms of the Project Gutenberg License included with this eBook or online at www.gutenberg.org. If you are not located in the United States, you will have to check the laws of the country where you are located before using this eBook. Title: Up To Date Business Editor: Seymour Eaton Release date: February 6, 2007 [eBook #20531] Most recently updated: December 7, 2022 Language: English Other information and formats: www.gutenberg.org/ebooks/20531 Credits: Produced by Barbara Tozier, Bill Tozier, Jacqueline Jeremy and the Online Distributed Proofreading Team at http://www.pgdp.net *** START OF THE PROJECT GUTENBERG EBOOK UP TO DATE BUSINESS *** Produced by Barbara Tozier, Bill Tozier, Jacqueline Jeremy and the Online Distributed Proofreading Team at http://www.pgdp.net UP-TO-DATE BUSINESS HOME STUDY CIRCLE LIBRARY EDITED BY SEYMOUR EATON UP TO DATE BUSINESS INCLUDING LESSONS IN BANKING, EXCHANGE, BUSINESS GEOGRAPHY, FINANCE, TRANSPORTATION AND COMMERCIAL LAW FROM THE CHICAGO RECORD NEW YORK THE DOUBLEDAY & McCLURE CO. 1900 Copyright, 1897, 1898, 1899, by the CHICAGO RECORD COPYRIGHT, 1899 by SEYMOUR EATON COPYRIGHT, 1899, 1900, by VICTOR F. LAWSON CONTENTS I GENERAL BUSINESS INFORMATION PAGE I. Commercial Terms and Usages 3 II. Commercial Terms and Usages (_Continued_) 4 III. Bank Cheques 6 IV. Bank Cheques (_Continued_) 8 V. Bank Cheques (_Continued_) 12 VI. Bank Drafts 15 VII. Promissory Notes 18 VIII. The Clearing-house System 21 IX. Commercial Drafts 26 X. Foreign Exchange 31 XI. Letters of Credit 37 XII. Joint-stock Companies 41 XIII. Protested Paper 46 XIV. Paper Offered for Discount 49 XV. Corporations 51 XVI. Bonds 54 XVII. Transportation 57 XVIII. Transportation Papers 59 Examination Paper 64 II BUSINESS GEOGRAPHY TRADE FEATURES I. The Trade Features of the British Isles 69 II. The Trade Features of France 94 III. " " " " Germany 102 IV. " " " " Spain and Italy 111 V. " " " " Russia 120 VI. " " " " India 129 VII. " " " " China 139 VIII. " " " " Japan 148 IX. " " " " Africa 157 X. " " " " Australia and Australasia 166 XI. " " " " South America 177 XII. " " " " Canada 187 XIII. " " " " The United States 194 Examination Paper 210 III FINANCE, TRADE, AND TRANSPORTATION I. National and State Banks 215 II. Savings Banks and Trust Companies 221 III. Corporations and Stock Companies 225 IV. Borrowing and Loaning Money 228 V. Collaterals and Securities 233 VI. Cheques, Drafts, and Bills of Exchange 240 VII. The Clearing-house System 248 VIII. Commercial Credits and Mercantile Agencies 254 IX. Bonds 263 X. Transportation by Rail 267 XI. Freight Transportation 274 XII. Railroad Rates 281 XIII. Stock and Produce Exchanges 288 XIV. Storage and Warehousing 294 Examination Paper 301 IV COMMERCIAL LAW I. The Different Kinds of Contracts 309 II. The Parties to a Contract 312 III. The Parties to a Contract (_Continued_) 315 IV. The Consideration in Contracts 318 V. The Essentials of a Contract 321 VI. Contracts by Correspondence 326 VII. What Contracts Must Be in Writing 332 VIII. Contracts for the Sale of Merchandise 336 IX. The Warranties of Merchandise 340 X. Common Carriers 344 XI. The Carrying of Passengers 347 XII. On the Keeping of Things 350 XIII. Concerning Agents 353 XIV. The Law Relating to Bank Cheques 358 XV. The Law Relating to Leases 363 XVI. Liability of Employers to Employés 369 XVII. Liability of Employers to Employés (_Continued_) 373 Examination Paper 377 V PREPARING COPY FOR THE PRESS AND PROOF-READING I. Preparing Copy 381 II. On the Names and Sizes of Type 382 III. The Terms Used in Printing 384 IV. Marks Used in Proof-reading 387 ILLUSTRATIONS I GENERAL BUSINESS INFORMATION PAGE A Poorly Drawn Cheque 7 A Carefully Drawn Cheque 8 A Cheque Drawn so as to Insure Payment to Proper Party 9 A Cheque Payable to Order 11 A Blank Indorsement 11 A Cheque Made to Obtain Money for Immediate Use 13 A Certified Cheque 14 A Cheque for the Purchase of a Draft 16 A Bank Draft 17 Ordinary Form of Promissory Note 18 A Promissory Note Filled Out in an Engraved Blank 19 A Special Form for a Promissory Note 20 The Advantages of the Clearing-house System 22 The Route of a Cheque 24 Backs of Two Paid Cheques 25 A Sight Draft Developed from Letter 27 A Sight Draft 28 An Accepted Ten-day Sight Draft 28 An Accepted Sight Draft 29 A Time Draft 29 Foreign Exchange 32 A Bill of Exchange (Private) 35 A Bill of Exchange (Banker's) 36 First Page of a Letter of Credit 38 Second Page of a Letter of Credit 40 A Certificate of Stock in a National Bank 42 A Certificate of Stock in a Manufacturing Company 43 A Protest 48 A Private Bond 55 A Shipping Receipt ("Original") 60 A Steamship Bill of Lading 61 A Local Waybill 62 II BUSINESS GEOGRAPHY London the Natural Centre of the World's Trade 72 British Mercantile Marine 74 London Bridge 76 The Coal-fields of England 80 The Manchester Ship Canal 84 The Great Manufacturing Districts of England 88 France Compared in Size with the States of Illinois and Texas 95 Street Scene in Paris, Showing the Bourse 97 Approximate Size of the German Empire 104 North Central Germany, Showing the Ship Canal and the Leading Commercial Centres 109 Spain Compared in Size with California 113 Italy and its Chief Commercial Centres 117 Russia, the British Empire, and the United States Compared 121 Moscow 127 Comparative Sizes of India and the United States 133 China and its Chief Trade Centres 145 Japan's Relation to Eastern Asia 155 The Partition of Africa 159 Australia 171 The Most Prosperous Part of South America 183 Trade Centres of Canada and Trunk Railway Lines 192 Export Trade of United States and Great Britain Compared 198 United States Manufactures and Internal Trade Compared with the Manufactures and Internal Trade of all Other Countries 199 Principal Articles of Domestic Exports of the United States 205 III FINANCE, TRADE, AND TRANSPORTATION The Bank of England 216 Showing Cheque Raised from $7.50 to $70.50 241 A Certified Cheque 244 A Bank Draft 245 A Bill of Exchange 246 Illustrating Cheque Collections 252 A Mercantile Agency Inquiry Form 259 Specimens of Interest Coupons 266 Judge Thomas M. Cooley, First Chairman of the Interstate Commerce Commission 287 The Paris Bourse 289 Interior View of New York Stock Exchange 290 V PREPARING COPY FOR THE PRESS AND PROOF-READING A Printer's Proof 390 A Printer's Corrected Proof 391 GENERAL BUSINESS INFORMATION I. COMMERCIAL TERMS AND USAGES [Illustration] There is a distinction between the usage of the names COMMERCE and BUSINESS. The interchange of products and manufactured articles between countries, or even between different sections of the same country, is usually referred to as _commerce_. The term _business_ refers more particularly to our dealings at home--that is, in our own town or city. Sometimes this name is used in connection with a particular product, as the _coal_ business or the _lumber_ business, or in connection with a particular class, as the _dry-goods_ business or the _grocery_ business. The name _commerce_, however, seldom admits of a limited application. In the United States TRADE is synonymous with _business_. The word TRAFFIC applies more especially to the conveyance than to the exchange of products; thus we refer to _railroad_ traffic or _lake_ traffic. PRODUCTS, when considered articles of trade, are called _merchandise, goods, wares_. The term MERCHANDISE has the widest meaning, and includes all kinds of movable articles bought or sold. GOODS is applied more particularly to the supplies of a merchant. WARES is commonly applied to utensils, as _glassware_, _hardware_, etc. GROSS commonly means coarse or bulky. In trade it is used with reference to both money and goods. The _gross_ weight of a package includes the weight of the case or wrappings. The larger sum in an account or bill--that is, the sum of money before any allowance or deductions are made--is the _gross_ amount of the bill. The word NET is derived from a Latin word meaning neat, clean, unadulterated, and indicates the amount of goods or money after all the deductions have been made. To say that a price is _net_ is to indicate that no further discount will be made. The word FIRM relates to solidity, establishment, strength, and in a business sense signifies two or more persons united in partnership for the purpose of trading. The word HOUSE is very frequently used in the same sense. In mercantile usage _house_ does not mean the building in which the business is conducted, but the men who own the business, including, perhaps, the building, stock, plant, and business reputation. The name CONCERN is often used in a very similar way. The name MARKET expresses a locality for the sale of goods, and in commerce is often used to denote cities or even countries. We say that Boston is a leather market, meaning that a large number of Boston merchants buy and sell leather. In the same sense we call Chicago a grain market, or New Orleans a cotton market. In its more restricted sense the name _market_ signifies a building or place where meat or produce is bought and sold. We say that the _market is flooded_ with a particular article when dealers are carrying more of that article than they can find sale for. There is _no market_ for any product when there is no demand. The money market is _tight_ or _close_ when it is difficult to borrow money from banks and money-lenders. II. COMMERCIAL TERMS AND USAGES (_Continued_) THE NATURAL RESOURCES of a country are mainly the mineral commodities and agricultural produce that it yields. The lumber and fish produced in a country are also among its natural resources. The positions and industries of cities are usually fixed by natural conditions, but the most powerful agent is the personal energy of enterprising and persevering men, who, by superior education, or scientific knowledge, or practical foresight, have often been able to found industrial centres in situations which no geographical considerations would suggest or explain. COMMISSION MERCHANTS receive and sell goods belonging to others for a compensation called a commission. A SELLING AGENT is a person who represents a manufacturing establishment in its dealings with the trade. The factory may be located in a small town, while the selling agent has his office and samples in the heart of a great city. As regards the quantity of goods bought or sold in a single transaction, trade is divided into WHOLESALE and RETAIL. The wholesale dealer sells to other dealers, while the retail dealer sells to the consumer--that is, the person who _consumes_, or uses, the goods. A JOBBER is one who buys from importers and manufacturers and sells to retailers. He is constantly in the market for bargains. The names JOBBER and WHOLESALER are often used in the same sense, but a jobber sometimes sells to wholesalers. WHOLESALE has reference to the quantity the dealer sells, and not to the source from which he buys, or the person to whom he sells. The wholesaler, as a rule, deals in STAPLES--that is, goods which are used season after season--though of course there are wholesalers in practically all businesses. Wholesale dealers send out TRAVELLERS or DRUMMERS, who carry samples of the goods. Frequently the traveller starts out with his samples from six months to a year in advance of the time of delivery. It is quite a common thing for the retailer to order from samples merchandise which at the time of placing the order may not even be manufactured. By the PRICE of a commodity is meant its value estimated in money, or the amount of money for which it will exchange. The exchangeable value of commodities depends at any given period partly upon the expense of production and partly upon the relation of supply and demand. Prices are affected by the creation of monopolies, by the opening of new markets, by the obstructing of the ordinary channels of commercial intercourse, and by the anticipation of these and other causes. It is the business of the merchant to acquaint himself with every circumstance affecting the prices of the goods in which he deals. The entire world is the field of the modern merchant. He buys raw and manufactured products wherever he can buy cheapest, and he ships to whatever market pays him the highest price. Our corner grocer or produce-dealer may furnish us with beef from Texas, potatoes from Egypt, celery from Michigan, onions from Jamaica, coffee from Java, oranges from Spain, and a hundred other things from as many different points; and yet, so complete is the interlocking of the world's commercial interests, and so great is the speed of transportation, that he can supply us with these necessaries under existing conditions more easily and readily than if they were all grown on an adjoining farm. III. BANK CHEQUES A CHEQUE is an order for money, drawn by one who has funds in the bank. It is payable on demand. In reality, it is a _sight draft_ on the bank. Banks provide blank cheques for their customers, and it is a very simple matter to fill them out properly. In writing in the amount begin at the extreme left of the line. The illustration given below shows a poorly written cheque and one which could be very easily _raised_. A fraudulent receiver could, for instance write, "_ninety_" before the "_six_" and "9" before the figure "6," and in this way raise the cheque from $6 to $96. If this were done and the cheque cashed, the maker, and not the bank, would become responsible for the loss. You cannot hold other people responsible for your own carelessness. A cheque has been raised from $100 to $190 by writing the words "_and ninety_" after the words "_one hundred_." One of the ciphers in the figures was changed to a "9" by adding a tail to it. It is wise to draw a running line, thus ~~~~~~, after the amount in words, thus preventing any additional writing. [Illustration: A poorly drawn cheque.] The illustration on page 8 shows a cheque carefully and correctly drawn. The signature should be in your usual style, familiar to the paying teller. Sign your name the same way all the time. Have a characteristic signature, as familiar to your friends as is your face. A cheque is a draft or order upon your bank, and it need not necessarily be written in the prescribed form. Such an order written on a sheet of note-paper with a lead-pencil might be in every way a legally good cheque. [Illustration: A carefully drawn cheque.] Usually cheques should be drawn "_to order_." The words "_Pay to the order of John Brown_" mean that the money is to be paid to John Brown, or to any person that he _orders_ it paid to. If a cheque is drawn "_Pay to John Brown or Bearer_" or simply "_Pay to Bearer_," any person that is the bearer can collect it. The paying teller may ask the person presenting the cheque to write his name on the back, simply to have it for reference. In writing and signing cheques use good black ink and let the copy dry a little before a blotter is used. _The subject of indorsements will be treated in a subsequent lesson._ IV. BANK CHEQUES (_Continued_) The banks of this country make it a rule not to cash a cheque that is drawn payable to order, unless the person presenting the cheque is known at the bank, or unless he satisfies the paying teller that he is really the person to whom the money should be paid. It must be remembered however, that a cheque drawn to order and then indorsed in blank by the payee is really payable to bearer, and if the paying teller is satisfied that the payee's signature is genuine he will not likely hesitate to cash the cheque. In England all cheques apparently properly indorsed are paid without identification. [Illustration: A cheque drawn so as to insure payment to proper party.] In drawing a cheque in favour of a person not likely to be well known in banking circles, write his address or his business after his name on the face of the cheque. For instance, if you should send a cheque to John Brown, St. Louis, it might possibly fall into the hands of the wrong John Brown; but if you write the cheque in favour of "John Brown, 246 West Avenue, St. Louis," it is more than likely that the right person will collect it. If you wish to get a cheque cashed where you are unknown, and it is not convenient for a friend who has an account at the bank to go with you for the purpose of identification, ask him to place his signature on the back of your cheque, and you will not likely have trouble in getting it cashed at the bank where your friend keeps his account. By placing his signature upon the back of the cheque he guarantees the bank against loss. A bank is responsible for the signatures of its depositors, but it cannot be supposed to know the signatures of indorsers. The reliable identifier is in reality the person who is responsible. INDORSING CHEQUES In indorsing cheques note the following points: